Real estate fraud and scams: Don’t become another victim

21 November 2016 Sasha Karen

Real estate agents can be targets for business fraud, trust account hacking and misleading documentation. So, how can you make sure that scammers do not cheat you or your business? And if the worst-case scenario happens and you do lose money, what should you do?

A lot of money is required to maintain a business and your operations are likely to falter if you are caught unawares by a scammer.

What do you need to do to ensure that doesn’t happen?

Stay scepticalTo stay on the ball and avoid scams, WA ScamNet, developed by Western Australia’s department of commerce, says you remain sceptical if a supplier you regularly pay asks you to change their payment details. You should contact the business by phone or email using the contact information provided on the supplier’s website.

Check the detailsDouble checking email addresses is important, as scammers may use an email address that is slightly different to the official address, with added or missing characters, such as dashes or periods, or a missing .au at the end of the address.

For example, a scammer may email a business with businesssupplier-australia123.com, with the official email address of the supplier being businesssupplieraustralia123.com.au

“Finance areas are advised to ensure processes around changing bank details are robust and include a step to validate the details via previously established contact details, known good phone numbers, email addresses and, ideally, a known individual,” says Detective Senior Sergeant Steve Potter of the WA Police Major Fraud Squad.

Check with the businessMichael Schaper, deputy chairman of the Australian Competition and Consumer Commission (ACCC), says if you are uncertain about an unfamiliar business, you should not hesitate to query them to allay your concerns.

“That can be everything from someone [from the business] who sends in an email, for example, pretending to be ... changing [their] bank account details’,” Mr Schaper says.

“That’s kind of funny. Established businesses don’t tend to change their bank accounts.”

If you receive such an email, Mr Schaper says you should check that the email, and its contents, are legitimate. This can be done by contacting the company on the phone, using the number you have always used to deal with them. He warns against using the phone number provided in the email.

Check the billsAnother way to avoid falling for scams, according to Mr Schaper, is to have two people check the bills.

Instances of billing fraud include being sent a bill for registering a domain name that does not belong to you or being sent a bill you have already paid.

“Sometimes the first person is just so busy paying the bills, [they think] ‘I don't care, I’m just paying them’,” Mr Schaper says.

He says it can often take a second pair of eyes to flag a suspicious situation.

“It's that check ... [the second person says], ‘Actually, that’s not our domain name’ or ‘We already paid this. This is a scam’.”

Use multiple bank accountsHaving a separate bank account specifically for the business can help protect you if your business gets scammed.

“If you’re dealing with online transactions, a lot of really small businesses ... actually use a separate bank account to the one they do their other business transactions in, because if you get compromised or you get scammed, you can get shut down. And it’s really hard to get it reinstated and that can be a real pain in terms of doing business with people,” Mr Schaper says.

What can you do if you are scammed?The worst-case scenario is you lose a substantial amount of money. What should you do next?

Mr Schaper suggests there are three people you should tell.

“You should report it to your financial institution and preferably the police and Scamwatch.”

As for the lost money, is there any chance you’ll ever see it again?

“The reality is … you’re probably not [going to]. That’s a really brutal truth and the reason for that is most of these scams are actually operating overseas, so they’re outside the reach of Australian law,” Mr Schaper says.

“They don’t stand around to reveal their true identity to us, and usually the money, once it’s sent to one bank account, will often be very quickly moved on to another account.

“Even finding it becomes really, really difficult. It’s not good news and that’s why we put a really strong premium on trying to educate people and say, ‘Look, if it just doesn’t ring true, just think really carefully before you put money down’.”

Types of financial fraud affecting SMEs

There are different types of financial fraud and scams that affect SMEs in particular. The most common of these are:

Phishing scams which netted $469 million from innocent businesses and consumers in 2012 alone, with the figure believed to have increased significantly each year since.

Fake recipient scams which are an increasing threat as e-commerce volumes soar.

Reclaim scams which are a sneaky way of charging victims upfront payments or fees for products or services that don’t actually exist.

Fake investment schemes which rank lower in terms of the volume of funds fraudulently obtained, but according to the ACCC are the most commonly complained about type of fraud.